Perkins Road Workforce Housing Developer Wins Big

Attorney Jay Leonard and developer Thomas Monihan walked out of the Zoning Board of Adjustment (ZBA) meeting with everything they had originally requested last year, when they first appeared at the board and saw their requests denied. In January, the ZBA agreed to rehear the issues involving the rental workforce housing project that Monihan wants to build on Perkins Road by Exit 5.
Monihan had requested three variances. The first was to allow phasing of the project to be over three years instead of the required five years; second, to be allowed to build 10 buildings with 24 units each rather than the 16 units per building required by ordinance; and lastly, to have 50 percent workforce tenants, where 75 percent workforce tenants is required.
In November 2012 the board heard the arguments presented by Leonard and denied the requests. One of the sticking points the board said was that the developer claimed it would not be “economically feasible” to build the project under the current ordinance. “It would be cost prohibitive to have to build 16 buildings to accommodate the amount of units needed to allow for a profit overall; and the costs incurred by five-year phasing, as interest and lending rates could go up during that time, would also be cost prohibitive,” Leonard said at the time. He also noted at that time that the requirement for 75 percent workforce housing would reduce the developer’s income, adding further financial strain.
Board member Larry O’Sullivan said in November and again in January, when the board agreed to rehear the requests, that he wanted “an independent appraisal of the financial claims that it would not be economically feasible.”
That independent appraisal came at the Wednesday, April 17 meeting in the form of a letter from Mettee Planning Consultants. O’Sullivan said ZBA secretary Jaye Trottier hired Mettee and that company reviewed the claims and, according to O’Sullivan, verified the rate of return claims and the conclusions regarding economic unfeasibility made by Leonard and Monihan.
“The memo was basically about two questions we had,” chairman James Smith said. “One was about the rate of return being 6.5 percent, and secondly the cost of construction at 16 versus the 24 units and how that would all work together. The gist of the memo confirmed what we had already heard in the previous presentation.”
“Your advisor (Mettee) reviewed the construction costs with our advisors, Rick Scudder and Russ Thibeault, and then he also independently verified them with both developers and several treatises and he confirmed that construction costs analysis seemed to be reasonable and a strong foundation for the theories that Mr. Thibeault put forth,” Leonard said.
Board member Neil Dunn said that even though the cost analysis was correct, the units are defined as luxury, with granite counter tops. “I don’t have granite countertops,” Dunn said. “We’re talking luxury for workforce housing, so I’m just trying to look at, how do we weigh from a cost basis that we have to support a workforce housing project that is high end, and I’m trying to get a handle on that.”
Leonard said the answer was that the units have to be marketable to tenants that aren’t workforce housing and that the units must be able to make a profit. “We’re also constricted to construct the workforce housing units in a similar fashion – that’s the balancing that has to be done,” Leonard said.
Dunn said the applicants were “circumventing the process” by going to the ZBA first because if they went to the planning board and were denied, they would have to go to court, not the ZBA, whereas by coming to the ZBA, they were “circumventing the intent of the ordinance.”
Smith said that because the applicants sought to go from 16 units per building to 24, it was beyond the scope of the planning board, which only had authority to go up to 20 units. Therefore the applicant had to go before the ZBA, which has the authority to go to 24 units via variance.
Building inspector Richard Canuel agreed, saying the most the planning board could approve as far as the number of units was 20 in order to issue a conditional use permit. He said that in the process of denying 20 units, the issue goes to court for resolution.
“If the zoning board were to vote to authorize up to 24 units per building, the planning board will still have to go through the conditional use process anyway because it is an increase in density,” Canuel explained. “The planning board still has the authority to deny that, whether you grant the variance or not, if they do not meet the criteria of the conditional use permit.”
O’Sullivan said he had been contacted by residents who didn’t want to see what other rental properties have become home to overflowing Dumpsters and unregistered cars parked in the driveway or up on blocks. “I am the owner of the property, and it is in my best interest to keep it clean and pleasant looking as I try to market the units to prospective tenants,” Monihan said. “Also, my wife and I aren’t out there with a broom sweeping the place, we have professional property managers to care for and maintain the property, and the project is new.
“I don’t know of the property that is being brought up, but after 30 or so years and the changing of ownership, that can sometimes happen, but I’m the owner and the property is new, and it is in my best interest as well as the tenants to keep it clean and presentable,” he added.
Resident Debra Paul, owner of Nutfield Publishing, the parent organization of the Londonderry Times, addressed the board, stating that parking was an issue. “You still have to accommodate for at least two cars for each one of those apartments so the parking lots are still going to have to be larger,” Paul said. Leonard responded that 1.75 parking spaces per apartment would be provided, as is required.
Paul asked if additional buildings would be constructed on the 26-acre site at some time in the future, and Leonard and Monihan said no further buildings were planned. “I’m against the workforce housing,” Paul said. “I really think that it shouldn’t be shoved down our throats. I know that you brought up the workforce housing thing, but that was done a long time ago during a totally different climate. By rights we really should re-evaluate it and re-look at it.”
Paul also said that what bothered her was that there was always a “reason as to why someone does something. I believe there is no such thing as a selfless act. “You give blood because it makes us feel good, not because it’s the right thing to do,” she said. “So in my mind I’m thinking why would you be spending X amount of dollars on lawyers and all these people, the whole entourage of people that come along with you, and you wouldn’t fight so hard if there wasn’t money to be made in this property.
I just can’t wrap my head around the necessity of it. Apartments are fine and I have nothing against apartments, but within the rules and regulations that we have put in place as a town.” She also termed granting variances a “slippery slope.” Resident Heather Anderson questioned why the applicant wasn’t asked to go back to the planning board to get permission for what he wanted, and agreed with Paul that there was a lot of “posturing and legal fees being spent here.”
She also echoed Dunn’s assertion that less luxury would produce tenants and would be more affordable.
O’Sullivan said the board wasn’t able to get into details about what would be included in the apartments. “That’s not what we’re here for,” he said. The board voted 4-1 to grant the phasing variance of three years versus five, with Dunn voting in opposition, and voted unanimously to grant the reduction of workforce tenants from 75 percent to 50 percent and unanimously to grant the 24 units per building instead of the 16 as required.